Quarterly Report — Form 10-Q
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 448K
2: EX-10.1 Ex-10.1: First Amendment to Loan and Security 7 29K
Agreement
11: EX-10.10 Ex-10.10: 2005 Stock Incentive Plan 15 85K
3: EX-10.2 Ex-10.2: Agreement for Purchase and Sale of Assets 26 105K
4: EX-10.3 Ex-10.3: Stock Transfer Agreement 11 36K
5: EX-10.4 Ex-10.4: Liquidity Agreement 3 19K
6: EX-10.5 Ex-10.5: Distribution Agreement 6 32K
7: EX-10.6 EX-10.6 Amendment No. 1 Trademark License 2 13K
Agreement
8: EX-10.7 Ex-10.7: Agreement Regarding Issuance of Shares 4 22K
9: EX-10.8 Ex-10.8: Settlement of Indebtedness Agreement 4 19K
10: EX-10.9 Ex-10.9: Form of Securities Purchase Agreement 14 65K
12: EX-31.1 Ex-31.1: Certification HTML 13K
13: EX-31.2 Ex-31.2: Certification HTML 13K
14: EX-32.1 Ex-32.1: Certification HTML 10K
15: EX-32.2 Ex-32.2: Certification HTML 10K
16: EX-99.1 Ex-99.1: First Amendment to Confidential License 1 11K
Agreement
EX-10.4 — Ex-10.4: Liquidity Agreement
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Exhibit 10.4
LIQUIDITY AGREEMENT
THIS AGREEMENT (the "AGREEMENT") is made as of August 22, 2005 between
Infogrames Entertainment SA, a societe anonyme organized under the Laws of
France ("IESA") and Atari, Inc., a Delaware corporation ("ATARI" and,
collectively with IESA, the "PARTIES").
WHEREAS, reference is made to that certain Asset Purchase Agreement, of even
date herewith, between Atari and Humongous, Inc., a Delaware corporation (the
"ASSET PURCHASE AGREEMENT"), which provides, among other things, for the
purchase by Humongous, Inc. ("HUMONGOUS") from Atari, of the Humongous IP and
other Purchased Assets (each as defined in the Asset Purchase Agreement) (the
Humongous IP and the other Purchased Assets being the "PURCHASED ASSETS"), and
Atari's agreement to make certain payments and provide certain services
post-closing related to the business being acquired by Humonogous, the cost or
value of which will total $1,985,598 (the "POST-CLOSING COSTS") in exchange for
90 shares of common stock of Humongus and the assumption of some obligations by
Humongous;
WHEREAS, reference is made to that certain Traite D'Apport de Titres de
Capital, of even date herewith (the "STOCK CONTRIBUTION AGREEMENT"), between
IESA and Atari, which provides, among other things, for the issuance of certain
shares of capital stock by IESA, referred to in the Stock Contribution Agreement
as les Actions Nouvelles (the "NEW SHARES"), to Atari in exchange for 90 shares
of common stock of Humongous;
WHEREAS, when the Purchased Assets are transferred to Humongous in accordance
with the Asset Purchase Agreement, they will be subject to liens (the "LIENS")
in favor of HSBC Business Credit (USA) Inc. ("HSBC"), but HSBC has agreed that
at such time as Atari has received $7,000,000, in cash, from the sale of the New
Shares or otherwise in connection with the sale of Humongous to IESA or the sale
of the Purchased Assets to Humongous, all the Liens on the Purchased Assets will
terminate;
WHEREAS, it is the intention of the Parties that Atari have the ability and
right to monetize a certain portion of the New Shares beginning on or about
August 31, 2005, as further described in this Agreement;
WHEREAS, it is the further intention of the Parties that, through the sale of
the New Shares or otherwise as described herein, Atari shall receive a total of
at least $7,000,000 in cash of that amount no later than the Due Date (as
defined below) and that, in addition, Atari will receive cash equal to the Post
Closing Costs no later than the dates they become due and payable.
WHEREAS, Atari and IESA shall cooperate during the period commencing on the
Effective Date (defined below) and ending on December 31, 2005 (the "LIQUIDITY
PERIOD") in connection with arranging the sale of some or all of the New Shares,
as further described in this Agreement; and
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NOW, THEREFORE, in consideration of the mutual promises and premises hereof, and
for other good and valuable consideration, the receipt and sufficiency of which
the Parties do hereby acknowledge, the Parties hereby agree as follows:
1. Atari and IESA shall cooperate, during the Liquidity Period, for
purposes of arranging the sale, without any commission to IESA, of
some or all of the New Shares via one or more block trades or in
another manner that constitutes an Offshore Transaction as that term
is defined in Rule 902 under the U.S. Securities Act of 1933, as
amended (the "SECURITIES ACT") with regard to transactions that are
subject to Rule 903 under the Securities Act.
2. Given its knowledge of the French Paris market, IESA through its
stock market brokers shall use commercially reasonable efforts to
identify buyers willing to purchase from Atari some or all of the
New Shares for a fair market price. All sales of the New Shares
shall comply with Rules 902 and 903 under the Securities Act.
3. Upon settlement of any sell transactions for the New Shares, the
proceeds of the sale net of brokers' fees (the "NEW SHARE PROCEEDS")
shall be remitted in immediately available funds to an account of
Atari (the "ATARI ACCOUNT.")
4. To the extent, if any, that the New Share Proceeds received by Atari
as of September 6,2005 (the "DUE DATE"), do not reach Seven Million
United States Dollars ($7,000,000,00)(such difference to be referred
to herein as the "SHORTFALL AMOUNT"), IESA (i) shall cause a
sufficient number of additional New Shares to be purchased from
Atari, and/or (ii) shall transmit the sum equal to the Shortfall
Amount to Atari on the Due date by wire transfer to the Atari
Account of immediately available funds, so that the Shortfall Amount
is paid to Atari no later than the close of business on the Due Date
(such a purchase of additional New Shares and/or payment is referred
to herein as a "SHORTFALL COVER PAYMENT").
5. In addition to the $7,000,000 mentioned above, the cumulative New
Share Proceeds shall be applied by Atari to pay for the Post-Closing
Costs. To the extent, if any, that at the time any Post-Closing
Costs become due and payable, the New Share Proceeds plus any
Shortfall Cover Payment and any Cost Cover Payments that Atari has
received are in total less than (a) $7,000,000 plus (b) all the
Post-Closing Costs Atari has previously incurred, plus (c) the
Post-Closing Costs that are currently being incurred (such
difference to be referred to herein as a "COST SHORTFALL AMOUNT"),
IESA shall cause a sufficient number of additional New Shares to be
purchased from Atari, and/or (ii) shall transmit the sum equal to
the Cost Shortfall Amount to Atari, at or prior to the time the
Post-Closing Costs become due and payable, so that the Cost
Shortfall Amount is paid to Atari no later than the time the
Post-Closing Costs become due and payable (each such a purchase of
additional New Shares and/or payment is referred to herein as a
"COST COVER PAYMENT"). The obligations of IESA under this Article 5
will under no circumstances exceed $1,985,598.
6. In the event IESA makes a Shortfall Cover Payment or a Cost Cover
Payment, IESA shall have the right, throughout the remainder of the
Liquidity Period, to recoup the Shortfall Cover Payment and any Cost
Cover Payments from any New Share Proceeds and, to that effect, any
New Share Proceeds received thereafter shall be
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automatically wired by Atari to IESA up to the total amount of the
Shortfall Cover Payment and all previously unrecouped Cost Cover Payments.
To the extent the additional New Share Proceeds during the Liquidity
Period do not enable IESA to recoup the Shortfall Cover Payment and all
Cost Cover Payments, IESA will bear the deficiency.
7. When Atari has received a total of $7,000,000 under paragraphs 3 and 4,
Atari will immediately (a) notify HSBC that Atari has received $7,000,000,
in cash, from the sale of the New Shares or otherwise in connection with
the sale of Humongous to IESA, and therefore all the Liens on the
Purchased Assets have terminated and (b) will request that HSBC deliver
all documents that are reasonably necessary or appropriate to evidence the
termination of those Liens.
8. The Parties shall execute, acknowledge and deliver such other instruments
or documents as may be reasonably necessary or appropriate to carry out
the transactions contemplated by this Agreement. Specifically, at any
time, from time to time following the Effective Date, at the request of
IESA, Atari shall execute and deliver such instruments of sale, transfer,
conveyance and assignment as required in order to facilitate and
effectuate the sale of the New Shares and the delivery of the New Share
Proceeds to Atari's bank account. Each Party will comply with the other
Party's reasonable requests to assist the requesting Party in its efforts
to effect the registration and sale of the New Shares as contemplated
herein. Any and all fees and expenses associated with the sale of the New
Shares shall be deducted from the New Shares Proceeds.
9. This Agreement shall take effect upon the admission of the New Shares to
listing on Euronext - Paris Bourse (the "Effective Date").
10. This Agreement will not affect the rights or obligations of the parties
under a letter dated August 9, 2005. from IESA to Atari relating, among
other things, to IESA's purchase of Humongous.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
INFOGRAMES ENTERTAINMENT, SA ATARI, INC.
("IESA") ("Atari")
By: /s/ Frederic Monnereau By: /s/ Jeffrey B. Kempler
---------------------- ---------------------
Name: Frederic Monnereau Name: Jeffrey B. Kempler
Its: General Counsel Senior Vice President, Business and
Legal Affairs
Atari,Inc.
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Dates Referenced Herein and Documents Incorporated by Reference
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